Migration Incentives and Taxation: Do Marginal Taxes Matter?

Bo Sandemann Rasmussen ()
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Bo Sandemann Rasmussen: Department of Economics, University of Aarhus, Denmark, Postal: 8000 Aarhus C, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Faced with ageing populations many European countries may be tempted to attract immigrants. One way to do this is to offer tax incentives. Since the decision to migrate is a discrete choice it should be average taxes that are important for the migration decision. If, however, the supply of working hours is endogenous it is shown that marginal taxes are also important for the migration decision, even after controlling for average taxes. Hence, countries interested in attracting immigrants can do so even without reducing average taxes by having less progressive tax systems than other countries.

Keywords: Migration; average taxes; marginal taxes; labor supply; population ageing. (search for similar items in EconPapers)
JEL-codes: F22 H24 (search for similar items in EconPapers)
Pages: 9
Date: 2004-09-21
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2004-7

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